Explain each of the following: opportunity cost 1.1 1.2 Ceteris paribus 1.3 Scarcity QUESTION TWO 2.1...

 

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Explain each of the following: opportunity cost 1.1 1.2 Ceteris paribus 1.3 Scarcity QUESTION TWO 2.1 The Production Possibility Frontier (PPF) is presented in Figure 2.1 below. It illustrates various combinations of two services, the General Practitioner (GP) treatment and Dental treatment at a hospital in Umlazi: Figure 2.1 50 40 GP Services (treatments) 20 30- 10- Patient Treatment Frontier .Y A 0 5 10 15 20 B 25 .X Dental Services (treatments) Indicate the letters that correspond to the following combinations on the graph: 2.1.1 The combination that illustrates inefficient allocation. Explain why the allocation is inefficient. 2.1.2 The combination that illustrates two efficient allocations, but contrast in allocation of GP services and Dental services? Explain how these two points can illustrate the economic problem of TRADE-OFF. 2.1.3 The combination that indicate an unattainable allocation? Discuss how this point explains the concept of SCARCITY. QUESTION THREE Using an appropriate diagram, show how resources can be efficiently allocated when producing two goods, namely bandages and syringes. Explain each of the following: opportunity cost 1.1 1.2 Ceteris paribus 1.3 Scarcity QUESTION TWO 2.1 The Production Possibility Frontier (PPF) is presented in Figure 2.1 below. It illustrates various combinations of two services, the General Practitioner (GP) treatment and Dental treatment at a hospital in Umlazi: Figure 2.1 50 40 GP Services (treatments) 20 30- 10- Patient Treatment Frontier .Y A 0 5 10 15 20 B 25 .X Dental Services (treatments) Indicate the letters that correspond to the following combinations on the graph: 2.1.1 The combination that illustrates inefficient allocation. Explain why the allocation is inefficient. 2.1.2 The combination that illustrates two efficient allocations, but contrast in allocation of GP services and Dental services? Explain how these two points can illustrate the economic problem of TRADE-OFF. 2.1.3 The combination that indicate an unattainable allocation? Discuss how this point explains the concept of SCARCITY. QUESTION THREE Using an appropriate diagram, show how resources can be efficiently allocated when producing two goods, namely bandages and syringes.

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Question ONE Opportunity cost Opportunity costs are the possible advantages that a person investor or company forgoes while deciding between two optio... View the full answer